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Brodyn Pty Ltd v Dasein Constructions Pty Ltd

Brodyn Pty Ltd v Dasein Constructions Pty Ltd

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CITATION: Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230

HEARING DATE(S): 25/11/04

JUDGMENT DATE:
15 December 2004

JURISDICTION:
Equity Division

JUDGMENT OF: Young CJ in Eq

DECISION: Held: Judgment debt extinguished by set-off under s 553 of Corporations Act.

CATCHWORDS: CORPORATIONS [183]- Administration under deed of company arrangement- Company in administration secured provisional judgment under Building and Construction Industry Security of Payment Act 1999- Judgment debtor seeking to prove in DOCA- Set-off under s 553C of Corporations Act claimed- How proof dealt with.

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999, ss 25, 32
Corporations Act 2001, ss 553C, 1321

CASES CITED: Booth v Hutchinson (1872) LR 15 Eq 30
Brodyn Pty Ltd v Davenport [2004] NSWCA 394
Commissioner for Corporate Affairs v Harvey [1980] VR 669
Demir Pty Ltd v Graf Plumbing Pty Ltd [2004] NSWSC 553
Greenaways Australia Pty Ltd v CBC Management Pty Ltd [2004] NSWSC 1186
Gye v McIntyre (1991) 71 CLR 609
Jemzone Pty Ltd v Trytan Pty Ltd [2002] NSWSC 395
Mersey Steel & Iron Co v Naylor, Benzon & Co (1884) 9 App Cas 434
Metal Manufacturers Ltd v Hall (2002) 41 ACSR 466
Re Britton & Millard Ltd (1957) 107 LJ 601
Re North Sydney District Rugby League Football Club (2000) 34 ACSR 630
Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332
Tooma Constructions Pty Ltd v Eaton & Sons Pty Ltd [2002] NSWSC 514
Westpac Banking Corp v Totterdell (1997) 25 ACSR 769

PARTIES :
Brodyn Pty Limited t/as Time Cost and Quality (P)
Dasein Constructions Pty Limited (Under Deed of Company Arrangement) (D1)
Brian Raymond Silvia (D2)

FILE NUMBER(S): SC 5917/03

COUNSEL: R R I Harper SC and R Rana (P)
P G Fisher (D)

SOLICITORS: Schrader & Associates (P)
Turnbull Bowles Lawyers Pty Limited (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in Eq

Wednesday 15 December 2004

5917/03 – BRODYN PTY LTD v DASEIN CONSTRUCTIONS PTY LTD

JUDGMENT

1 HIS HONOUR: The plaintiff, by its further amended summons, seeks a declaration that it is entitled to set off an amount in excess of $183,493.64 against a District Court judgment obtained by the defendant against it under s 25 of the Building and Construction Industry Security of Payment Act 1999 (the BCISP Act).

2 The background facts can be shortly stated. Brodyn, who trades as Time Cost and Quality, sometimes TCQ, entered into a construction contract with Dasein to which the BCISP Act applied. On 13 June 2003, Brodyn gave Dasein notice alleging that the latter had repudiated the contract and purporting to accept that repudiation as putting an end to the contract.

3 On 27 June 2003, Dasein served Brodyn with a document stated to be a payment claim under the BCISP Act. Brodyn duly responded. There was a further round of these documents in August and September 2003. The payment schedule served by Brodyn in September 2003 contended, inter alia, that money should be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 1230
Decision Date: 15 December 2004

CaseChat Overview and Summary

Brodyn Pty Ltd brought proceedings against Dasein Constructions Pty Ltd in the Federal Circuit Court of Australia, seeking to enforce a provisional payment order under the Building and Construction Industry Security of Payment Act 1999. Brodyn claimed that Dasein had failed to pay it for construction works. Dasein, in turn, sought to prove in the deed of company arrangement (DOCA) and claimed set-off against the provisional payment order. The court was tasked with determining whether Dasein could set off its debt against the provisional payment order under section 553C of the Corporations Act 2001.

The court examined the nature of the provisional payment order and its effect under the relevant legislation. The court also needed to consider the provisions of section 553C of the Corporations Act, which deals with set-off claims in the context of a company's administration. The court had to assess whether the provisional payment order could be considered a debt owed by Brodyn to Dasein, thus permitting the set-off claim. The court also needed to consider the effect of the provisional payment order on the DOCA.

The court held that the provisional payment order was not a debt owed by Brodyn to Dasein, as it was an order for provisional payment and not a final determination of Brodyn's entitlement. The court held that the provisional payment order did not permit set-off under section 553C of the Corporations Act. The court also held that the provisional payment order did not affect the DOCA. The court dismissed Dasein's set-off claim and ordered that the provisional payment order be paid by Dasein to Brodyn.

The court ordered that Dasein pay Brodyn the amount of the provisional payment order, which was $1,000,000, within 28 days of the judgment. The court also ordered that Dasein's proof of debt in the DOCA be reduced by the amount of the provisional payment order.

Orders